Vasopressin (AVP) antagonists represent a novel therapeutic class for the treatment of depression. The potential utility of these compounds has emerged from observations in depressed individuals, findings in animal models, and an understanding of changes in hypothalamic-pituitary-adrenal (HPA) axis regulation under chronic stress. This proposal seeks continued support for the development of SRX246-HCl, a novel vasopressin 1a (V1a) receptor antagonist that has shown efficacy in preclinical animal models of depression and anxiety, good plasma bioavailability and CNS penetration following oral administration, a strong safety profile, and high affinity and selectivity for the target receptor. The scientific basis for V1a antagonists as a pharmacotherapy for depression includes: 1) the neuroadaptation and dysregulation of HPA function that accompanies chronic stress in affected humans and in animal models of depression, 2) recognition that AVP, not CRF, drives HPA function associated with chronic psychological stress, 3) the CNS localization of V1a receptors in limbic system regions involved in HPA regulation and control of social behaviors, and 4) preclinical data with SRX246 showing efficacy in animal models employed as screens for antidepressant/anxiolytic activity. The development of SRX246 to date has been supported by SBIR Phase I and II grants, the National Toxicology Evaluation program, and a Series A private sector investment. Phase IIa support will enable a Phase I Clinical Trial to establish safety and tolerability in humans and continued development of back-up compounds. Positive results from these efforts will accelerate commercialization opportunities by significantly advancing the likelihood of a partnership with a major pharmaceutical house and/or additional private sector investment. The public health need for new pharmaceutical treatments for depression is well documented. Depression affects some 20 million Americans each year and carries a conservatively estimated annual total economic burden of $80 billion. Existing drugs for depression are not uniformly effective and frequently have undesirable side effects. These limitations demonstrate that a new treatment approach through V1a receptor antagonism may offer significant opportunities for improved outcomes with substantial societal benefit.